Israel cited Iran’s continued support on terror and human rights violations in calling on the Eu to rethink the move.

“It is the world’s worst state sponsor of terror. It funds murder throughout the Middle East. It hangs gays and brutally represses its own people. Iran brazenly violates its international obligations while literally emblazoning its missiles with ‘Israel will be wiped out,’ ” the Israeli Foreign Ministry said in a statement. “Iran should not be rewarded as it spreads murder and mayhem across the world.”

In the European Union statement, Mogherini referred to the diplomatic mission as “an EU delegation in Iran.”

“The European Union supports a strategy of gradual engagement that is comprehensive in scope, cooperative where there is mutual interest, critical when there are differences and constructive in practice,” she said.

Iran has signaled frustration that the lifting of sanctions after the nuclear deal has not yet let to significant investments as many international investors and banks are still wary of doing business with the Islamic Republic.